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Say hello to the mini-SUV, a first-of-its kind vehicle in India - and perhaps the world - that utility vehicle major Mahindra & Mahindra (M&M) is developing with Ssangyong, the South Korean SUV maker it acquired last year.

Codenamed the S101, the 'Nano' SUV - as it is being dubbed by some workers on M&M's shop floors - will be powered by 1-1.2 litre petrol engines and 1.5-litre diesel engines. The car is being developed at M&M's plant in Chakan on the outskirts of Pune - where the newly launched XUV500 is also being produced. The estimated price is between Rs 3 lakh and Rs 4 lakh.

The price tag is noteworthy because most mini-SUVs - typically under 4 metres in length - are premium products. The Jeep Wrangler, Nissan Juke and Skoda Yeti are some of the best-selling MINI and compact SUVs globally, yet their pricing is clearly premium - the Yeti, for instance, sells in India at over Rs 14 lakh.

If M&M can pull off the S101 at the stated price, it would make it the only mini-SUV in that price range anywhere in the world. To persist with the Nano analogy, it would do for SUVs what Tata Motors has done for cars by opening up an altogether new ultra low-cost category.

The S101 project is also the first joint development effort by the M&M-Ssangyong combine. For the South Korean maker of sports utility vehicles, the low-cost segment is alien, and hence a welcome addition to its range.